U.S. Retailers Fare Better Than Expected

AP ^ | 01/08/04 | ANNE D'INNOCENZIO

[Pikamax]

U.S. Retailers Fare Better Than Expected 22 minutes ago Add Business - AP to My Yahoo!

By ANNE D'INNOCENZIO, AP Business Writer

NEW YORK - Consumers who kept retailers in suspense for weeks gave many storeowners a better-than-expected holiday season after all, coming through at the last minute with a big spending spree. Even struggling department stores ended the season with solid results.

December results issued Thursday by the nation's biggest retailers showed that late shoppers helped companies including Wal-Mart Stores Inc., J.C. Penney Co. Inc., and Target Corp. offset a slow start to the season.

Still, the end-of-the-season sales surge didn't benefit all retailers; Gap Inc. and Kohl's Corp. were among the ones dissatisfied with their results.

And some retailers got their sales with heavy markdowns that eroded their profits. Wal-Mart warned Thursday that fourth-quarter earnings may fall at the low end of its projections.

Upscale stores including Neiman Marcus Group and Nordstrom Inc. were the star performers, posting sales results that far exceeded expectations. But December turned out to be a pleasant surprise for many department stores and apparel stores like May Department Stores Co., Federated Department Stores Inc., and Limited Brands, which ended up having a solid month.

Sears, Roebuck and Co. reported sluggish results, but they were better than expected.

"Industrywide, the last two weeks made up a lot of lost ground," said Michael P. Niemira, chief economist and director of research at the International Council of Shopping Centers. "There was a lot of worry, but in the end, sales came through."

The International Council of Shopping Centers-UBS sales tally of 77 retailers was up 4.2 percent, slightly above Niemira's forecast for a 4 percent gain.

The tally is based on what the industry calls same-store sales, those from stores open at least a year. Same-store sales are considered the best measure of a retailer's health.

After a slow start caused in part by northeastern snowstorms, retailers had warned that the season might be disappointing. So stores were counting even more heavily on the final days before Christmas and post-holiday shopping to meet their sales goals.

The still sluggish job market made many consumers wary, and many held off buying until they got the markdowns they wanted.

The Labor Department (news - web sites) said Thursday that new claims for unemployment benefits rose last week, ending a three-week string of declines. New claims rose to 353,000, up 14,000 for the week ending Jan. 3, compared to 339,000 new applications the previous week.

Economists said the increase was likely due to the holidays, as people had less time to file for unemployment benefits the week of Christmas.

Wal-Mart said December same-store sales were up 4.3 percent, beating Wall Street analysts' expectations. Wal-Mart's total sales were up 11.3 percent.

Meanwhile, Penney said same-store sales for its department store business rose 4.3 percent, beating the 1.3 percent estimate of analysts surveyed by Thomson First Call. Penney's total sales were up 1.8 percent.

Target Corp. said same-store sales were up 4.1 percent, beating analysts' estimates of 3.4 percent. Total sales increased 9.9 percent.

Kohl's posted a 1.2 percent decline in same-store sales, which were in line with analysts' forecasts.Total sales were up 12.8 percent.

"We are very disappointed with our December sales performance," said CEO Larry Montgomery. "The business came very late in the month and at deeper discounts than planned."

At Federated, same-store sales were up 1.2 percent. Analysts had expected a 0.2 percent increase. Total sales were up 0.4 percent.

May reported that same-store sales were up 1.1 percent, beating Wall Street projections of a 1.8 percent decline. Total sales increased 2.3 percent.

At Limited Brands, same-store sales and total sales were up 6 percent. Analysts surveyed by Thomson First Call expected a 1.3 percent gain.

Selected same-store sales for December for other leading retailers:

_Abercrombie & Fitch, same-store sales were down 13 percent; total sales slipped 2 percent.

_Neiman Marcus, same-store sales increased 12.6 percent; total sales were up 15 percent.

_Nordstrom Inc., same-store sales were up 9.1 percent; total sales increased 12.2 percent.

_Saks Inc., same-store sales were up 5.1 percent; total sales increased 6.3 percent.

_Sears, same-store sales were down 0.6 percent for its domestic business; total sales declined 0.8 percent.

[theDentist]

"...gave many storeowners a better-than-expected holiday season after all..."

Amazing how the few stations that reported the season wasn't a "total depressing loss" aren't surprised ny this. CNN is probably aghast. I recall FOX saying long ago it was a great season.

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[Grampa Dave]

Remember how all of the left wing so called financial news centers the week of the blizzards were shouting, "Terrible Christmas!"

Yeah, the snow storms keep people out of the stores. They came back the weekend and the week of Christmas, which wasn't reported.

Usually, whenever, Reuters, AP, Bloomberg, CBS Financial News or ABCNNBC BS say anything negative about the markets or economic news, in a few weeks or the next month reality seeps out.

Reuters, AP, Bloomberg, CBS Financial News or ABCNNBC BS will do anything to keep GW from being re elected.

[LS]

And remember that we are NOT COUNTING all the internet sales, which by all accounts were WAAAAYYYY up this year!!!

[Grampa Dave]

Each year our internet purchases for Christmas and birthday gifts goes up.

This last year with the exception of some local gifts for my wife and our grandkids, all of my Christmas purchases came via the internet.

We ordered bike products, fly fishing products, toys, household gifts, candy, books and other gifts via the internet.

My wife who is a ludite re the internet, broke down this year and ordered stuff for our sons, DIL, grandkids, brothers, SILs, her mother and friends.

We weren't the only ones. Fedex had 3 trucks making deliveries each day, Brown had two trucks staffed with two people, and the priority mail people came at least once a day.

Brown apparently hired college kids/jocks on Christmas vacation. They would run the packages to the house while the driver drove up to the next stop and had the packages ready for the next home for the runner.

[StriperSniper]

Retailers Fare Better Than Expected 22 minutes ago

I wonder how they feel about three o'clock? ;-)

[KevinDavis]

I did 90% of my Christmas shopping on the Internet this year. Talk about saving time and money.

[SierraWasp]

Hey dude! Remember this one?

12:30pm 01/08/04

Calpine among top 5 most active on NYSE (CPN) By Lisa Sanders

DALLAS (CBS.MW) -- Calpine (CPN) shares are up 1.5 percent to $5.46 on volume of 18 million -- making the stock the most active in the energy sector and the 5th most active on the New York Stock Exchange. Schaeffer's Option Activity Watch notes "the stock's short interest ratio stands at a hulking 9.21, sticking investors with more than a week to cover the roughly 69.5 million shorted shares."

[KevinDavis]

Don't forget the usual Doom and Gloomers here too.

[Miss Marple]

I am with you on internet shopping. I buy almost all books, CD's, and DVD's over the net. This year I also bought toys and clothes.

In addition, my daughter is registered at Target and Bed, Bath, and Beyond (she is getting married in February) and her friends can pull up her registration on the internet and order direct!

Internet shopping is my favorite thing. I loathe going to the mall, and half the time they are out of what I want.

[John O]

Internet shopping is my favorite thing

And if you shop wisely you save the sales tax

[Grampa Dave]

Last year three couples we are friends with had children who got married.

They were registered with various on line sites. I just went on the internet and ordered the presents. Two were sent to their addresses after the wedding, and the other one was sent to us as they wanted the presents at the wedding.

The only duplication re gifts that these couple had, came from those who didn't bother to go on line and bought a gift and brought it to the wedding.

We have changed the beds that our grandkids use here. We bought a twin trundle for our grand daughter, our grandson gets her youth bed, and his crib/baby bed went to some new granparents.

For linen for our grand daughter's new bed, my wife insisted that we go the local big mall which is about 20 miles away. Macy's and Linen and Things in the mall don't carry youth linens. On the way home, my wife said, "Don't say anything just find stuff on the internet, and I will pick it out. Tomorrow she is off, and I will have several choices.

[SierraWasp]

What do you make of this? The Vickers site that I've linked in the recent past, makes this article a little suspect as it's now turning sharply upward!!! They don't mention that in this article, even thought they quote the editor of the Vickers site. (sorry if this isn't exactly on thread subject)

Insider buying hits 8-year low in '03

Some CEOs rewarded for loading up in a rising market

By Matt Andrejczak, CBS.MarketWatch.com Last Update: 2:08 PM ET Jan. 8, 2004

WASHINGTON (CBS.MW) -- Ivax Chairman and CEO Phillip Frost considers himself an impulsive buyer of his Miami-based company's shares, and he pulled the trigger in a big way in 2003.

Frost bought 880,000 shares of the generic drug maker, making him one of the biggest insider buyers among CEOs. His bet paid off -- the company's shares (IVX: news, chart, profile) soared 96.7 percent in 2003.

Frost was one of only a small number of corporate insiders who put their money where their faith was last year -- despite the bull market's return. Corporate insiders bought $1.1 billion of stock -- the lowest annual level 1995, according to Thomson Financial data.

Ignoring signs of a recovering economy, insiders continued selling shares in droves last year even as the stock market bounced back from three-year lows. Insider sales surged 40 percent to $29 billion over the prior year - nearing 2001's selling activity.

One reason selling far outpaced buying last year, observers say, is because many insiders' stock options were no longer worthless.

"People are cashing in while the going is good," said Jonas Ferris, editor of Insider Moves and co-founder of Maxfunds.com.

Insider selling accelerated in the fourth quarter as executives unloaded $10.8 billion of stock, marking the highest quarterly selling in more than three years, according to Thomson Financial.

David Coleman, editor of Vickers Weekly Insiders Report, said such aggressive selling signals that executives are wary about the stock market's prospects this year.

"Insiders are looking for a safer haven for their money," Coleman said.

Winners in the bunch

Chesapeake Energy Chief Executive Aubrey McClendon was among the batch of insiders who bucked last year's selling trend. He purchased 777,807 shares of Chesapeake Energy at prices ranging from $7.37 to $9.25 per share.

"We eat our own cooking," McClendon said in an interview, and it looks like "we're decent cooks."

Shares of Chesapeake Energy (CHK: news, chart, profile) closed Wednesday at $13.57. The stock finished 70.6 percent higher in 2003.

Tom Ward, co-founder and president of Oklahoma City-based Chesapeake, also made a string of significant purchases. He bought 934,457 shares at prices ranging from $7.37 to $10.35 per share.

In 2003, according to Thomson Financial, other big insider buyers included Valence Technology (VLNC: news, chart, profile) director Carl Berg and Energizer Holdings Chairman William Stiritz.

Berg, a major real estate developer and private financier from Silicon Valley who helped found Valence Technology in 1989, bought six million shares of the company in three separate transactions stretching from April to December.

Through his investment vehicle Berg & Berg Enterprises, he has agreed to inject another $10 million into Valence Technology this year. The Austin, Tex.-based firm makes rechargeable batteries for laptop computers and cell phones. The stock skyrocketed last year, ending up 183 percent. It closed Wednesday at $4.21.

Energizer's Stiritz bought 708,300 shares in transactions ranging from late January and early February. Shares of the St. Louis-based maker of batteries and razors climbed 31.3 percent last year. The stock (ENR: news, chart, profile) closed Wednesday at $36.92.

Ivax's Frost is his company's biggest shareholder, with almost 17 percent of the company's stock. As he puts it, other investments make him uneasy.

Said Frost, who's also sits on the boards of Northrop Grumman and the American Stock Exchange: "I'm always looking for new investments, but I haven't found one that I'm comfortable with."

[Grampa Dave]

Basically, we have to have a skeptic look at anything that comes out trying to paint a really bad situation the past few months.

The data you posted today on insider buying makes that previous so called report look really skewed.

[DeFault User]

Upscale stores including Neiman Marcus Group and Nordstrom Inc. were the star performers, posting sales results that far exceeded expectations.

Must be those damn tax breaks for the rich! ;o)

[SierraWasp]

Look at the UPTICK on the graph!!!

Which "previous so called report" are you referring to?

[SierraWasp]

You know, like you, I've been putting all the media negativity in proper perspective due to their hatred of the President. I've been thinking and acting positively and making substantial gains!!!

The only thing that has nagged at me was this insider buying/selling, wondering what was up with all the selling in the last half of last year according to the site I linked above. Now, finally, I see a sharp turnaround right at the end/beginning of the year.

A lot goes into the Vickers site, but it is a weighted trend that makes sense to me, but the article I posted above adds some insights along with what I think is still some negative spinning. I think there are more personal reasons for the insider selling that's gone on, than any lack of faith in a strong 2004!!! (or in Bush!!!)

[SierraWasp]

Here's another take on the same subject:

Late shopping saves holiday sales

By Jennifer Waters, CBS.MarketWatch.com Last Update: 3:45 PM ET Jan. 8, 2004

CHICAGO (CBS.MW) -- It turned out to be a merry holiday season after all as consumers finally pulled their wallets out during the latter half of December to help retailers deliver their best seasonal sales performance since 1999.

An eye-popping 74 percent of the retailers tracked by Thomson First Call served up better-than-expected December sales results Thursday as spending sprees in the final days ahead of Christmas were only outdone by a rush of postholiday shopping.

"Consumers have increasingly waited later to shop over the last five years and that trend got strong traction this year," said First Call analyst Ken Perkins. "We also noted the increasing importance of gift cards."

Cumulatively, the results rolled in with a 4.2 percent increase in sales at stores open longer than a year -- a key industry benchmark known as comparable-store sales. The results were in line with predictions by the International Council of Shopping Centers but ahead of even the best intramonth average projection reached by analysts surveyed by First Call.

Bogged down as snowstorms and other inclement weather kept consumers at home, retailers pulled out the promotional punches in the waning days of the preholiday period. That proved helpful to sales, but harmful to profit margins.

Wal-Mart (WMT: news, chart, profile) recorded a solid 4.3 percent increase in sales, ahead of the 3.3 percent average expectation as derived by First Call. However, the world's largest retailer said earnings for the quarter are tracking toward the low end of expectations as the behemoth turned to aggressive pricing. Analysts have pegged a profit of 64 cents a share, the midpoint of Wal-Mart's range.

At Target (TGT: news, chart, profile), sales at Mervyn's stores pulled down the corporation's overall results to the low end of expectations with a 4.1 percent increase overall. Marshall Field's declined a narrower-than-expected 1.7 percent while the Target stores rose to a better-than-expected 4.1 percent.

Meanwhile, Kohl's (KSS: news, chart, profile) managed to meet diminished projections for a 1.2 percent decline in sales but surprised Wall Street by hacking as much as 20 cents off its earnings forecast for the quarter. Kohl's now sees a profit in a range of 68 cents a share to 70 cents a share, as compared to 88 cents from First Call.

"We were very disappointed with our December sales performance," said CEO Larry Montgomery in a press release. "The business came very late in the month and at deeper discounts than planned."

Department stores perform well

Fashion was at play for many retailers, giving even the usually depressed department-store segment some holiday spirit.

"After years of spending on ceiling fans, leaf blowers, new gutters and other sexy home improvement expenditures, there is now a strong wave of demand for personal fashion products," said Bernard Sands analyst Richard Hastings. "This is a strong wave that will continue all the way through the current year."

Ann Taylor is a clear case in point. The women's-wear retailer turned in a stunning 26.2 percent gain in same-store sales that blew away First Call's 8.2 percent forecast. What's more, total sales zipped up a breathtaking 40.1 percent to $215.9 million for the month.

Not surprisingly, Ann Taylor recast its profit projection to a range of 54 cents to 56 cents a share -- the second increase in the quarter. According to First Call, analysts have been expecting 45 cents a share.

Chico's (CHS: news, chart, profile), which sells exclusively designed women's clothing, saw sales at its company-owned stores swell by its own remarkable 24.3 percent that solidly outpaced Wall Street's 19.9 percent estimate. December sales, however, knocked all bets out with an astonishing 61.1 percent vault to a record $91 million over last year.

Limited (LTD: news, chart, profile) posted a cumulative 6 percent gain, thanks mostly to a 10 percent leap in same-store sales at its Express stores. The Express stores were expected to see a 2.1 percent decline in sales. Victoria's Secret, on the other hand, was slated to slip 0.3 percent, but tumbled 5 percent instead.

Sears Roebuck (S: news, chart, profile) didn't do as bad as originally thought, reporting a 0.8 percent decline instead of the 2 percent projected. J.C. Penney (JCP: news, chart, profile) surprised in the other direction, pulling a 4.3 percent increase in sales at department stores in business longer than a year. Analysts pegged a 1.3 percent increase.

May (MAY: news, chart, profile) came in better than expected at a negative 1.1 percent instead of a minus 1.8 percent while Federated managed a 1.2 percent gain, higher than the 0.2 percent forecast.

As expected, upscale retailers took in high-end sales. Neiman Marcus (NMG.A: news, chart, profile) (NMG.B: news, chart, profile) reported a 12.6 percent gain, better than the 8.2 percent expectation, while Saks (SKS: news, chart, profile) and Nordstrom (JWN: news, chart, profile) saw sales rise by 5.1 percent and 9.1 percent, respectively, easily beating anticipated increases of 2.8 percent and 4.1 percent.

Tiffany (TIF: news, chart, profile), which isn't tracked by First Call, delivered 16 percent gains and raised its earnings outlook as a result.

There were some notable losers. Gap Inc. (GPS: news, chart, profile) reported a measly 1 percent gain, hurt by weak performances at Old Navy and its namesake U.S. stores. Analysts, who might have been too aggressive, were looking for a 5.1 percent rise in same-store sales.

Abercrombie & Fitch (ANF: news, chart, profile) took another turn down its path of declining sales, reporting a minus-13 percent sales results. Analysts were expecting sales to fall 10.5 percent.

Dillard's (DDS: news, chart, profile) kept pace with its string of disappointing results, falling 4 percent compared to last year, deeper than the minus-2.9 percent at First Call.

Talbot's (TLB: news, chart, profile) blamed "extremely low levels of inventory" for a 3.8 percent drop in sales instead of the 0.3 percent drop forecast by First Call.

Without much to sell off in January, Chief Executive Arnold Zetcher set earnings expectations in a range of 37 cents a share to 41 cents a share. Earlier, Zetcher would only say that profits for the fourth quarter would fall below the 48 cents a share reported last year.

"In retrospect, we believe that our inventories were too lean in the fourth quarter, which ultimately limited our sales potential," he said in the sales release.

"However, at the time we finalized our fall/holiday inventory commitments," he added, "given the sales trends that we had been experiencing and the uncertain retail environment, we feel it was the appropriate business decision to minimize our downside risk."

At the wholesale clubs, sales were brisk. Costco (COST: news, chart, profile) rang up an 11 percent increase over the same period last year while Sam's Club came in 6.1 percent higher. BJ's Wholesale (BJ: news, chart, profile) came in with a 6.6 percent increase that fell short of the 7.5 percent projection.

Big Lots (BLI: news, chart, profile) beat out expectations with a 6.2 percent rise in same-store sales. Fred's (FRED: news, chart, profile) brought in sales that were 7 percent above last year and 1.4 percentage points ahead of estimates. Dollar General (DG: news, chart, profile) clocked a 4.3 percent increase, better than the 2.6 percent expected while Family Dollar (FDO: news, chart, profile) edged up 0.7 percent instead of the 1.5 percent expected.

On the teen-retail front, the results were as fickle as the customers. Pacific Sunwear (PSUN: news, chart, profile) and Hot Topic (HOTT: news, chart, profile) looked invincible again with outstanding results. Pacific Sunwear doubled expectations with sales that were up 12 percent, above the 6.1 percent increase expected. Hot Topic delivered a 10.1 percent gain, much better than the 4.9 percent estimate. Bebe (BEBE: news, chart, profile) brought in sales that were 7 percent higher, outpacing the 4.5 percent expectation.

[Grampa Dave]

Now watch all of the lefty so called financial experts spend their time talking about the companies that failed to have good Christmas results.